Bob Dudley, in his 38 years in the oil industry, has never seen anything like what happened with BP Plc’s old fields last year: They gushed more crude. [Under the Hubbert peak oil theory this is not supposed to happen.]
“I cannot remember ever in my career having seen a negative decline rate,” the British oil-giant’s chief executive officer said in an interview on the sidelines of the CERAWeek by IHS Markit energy conference in Houston.
The fact that Dudley isn’t alone in seeing mature fields dwindling less than expected -- and in BP’s case surprisingly increasing -- means the Organization of Petroleum Exporting Countries has one more thing to worry about. As if the shale boom wasn’t enough of a headache.
Better results from legacy fields, also observed by producers like Royal Dutch Shell Plc and countries like Norway, further complicate efforts by petro-states like Saudi Arabia to push prices higher by curbing supplies.
Across the industry, the results weren’t as spectacular as BP’s, but still impressive, executives and officials at CERAWeek said. According to the International Energy Agency, production from mature oil fields dropped last year by about 5.7 percent, the least in data going back one decade.And remember all that talk about operators cutting back on CAPEX in deepwater these past few years?
That comes as a huge surprise because the oil industry cut spending dramatically during the three-year downturn it’s just started to emerge from, and managing deep-water fields to arrest their demise can be a multibillion-dollar affair. So, OPEC was hoping thriftier times would lead to faster declines from mature wells that still account for more than half of the world’s output.
But the need to stretch each dollar spent is exactly why Big Oil is getting more from those fields, according to Wael Sawan, executive vice-president for deep water at Shell. The lower decline rates are part of the response to low oil prices.Or put another way: necessity is the mother of invention.
What a doofus:
Tell Me Again Why Trump's Tariffs Were Wrong For The Country
I think most folks would agree that the politician pictured above was of the party that aligned itself with the unions. And yet, despite eight years of opportunity and much lobbying from the unions, President Obama never did a thing about China dumping cheap aluminum and steel on the US.
President Trump did that early in his second term. He probably would have gotten it done in his first term had Congress not placed obstacles in his path during his first term on virtually everything and making it challenging for Trump to get the things done that he promised to do during his campaign.
Today, ArgusMedia is reporting that an aluminum smelter is about to restart -- in direct response to President Trump's actions:
Glencore subsidiary Century Aluminum will restart all production at its largest US primary smelter in Hawesville, Kentucky, following new Section 232 tariffs on steel and aluminum.
The Hawesville smelter has five pot lines, three of which have been idled since 2015. A full restart would add 150,000 metric tonnes (t)/yr of production by mid/late-2019 at an estimated cost of $115mn. The smelter has a rated capacity of 252,000 t/yr.
"The restart of that curtailed capacity has been dependent on an effective trade remedy...and we strongly believe the president's proclamation achieves that objective," chief executive Michael Bless said today.
Late last week, President Donald Trump confirmed that 10pc tariffs on most aluminum products exported to the US would take effect on 23 March, but exempted Canada and Mexico. Australia said it also has been exempted.
In addition to restarting production at Hawesville, Century plans to reline all five reduction lines.Tell me again that what Trump did was wrong. Yes, I know it will add one-half cent to the cost of each can of beer. So, settle for draft. Support your local bar.